2024-01-07 16:32:20
In 1924, Ford Model Ts sold for $260. Today, a new Nissan Versa (the cheapest car on the US market), on the other hand, costs $16,290. Although the Versa is much more expensive, people can still afford it more. In 1924, a blue-collar worker was paid 51 cents an hour. That means it cost 510 hours of work on a Model T.
In the United States today, a manual laborer makes an average of $36.50 look for per hour – a new Nissan thus costs 446 working hours. This makes it 64 hours “cheaper” than a Model T. In this comparison, we can get a new car 12.5% cheaper today.
Of course, the above example is not entirely accurate: we did not take into account increased wealth inequalities, that is, that the average salary today less reflects the amount that workers actually receive in exchange for their work.
A 1911 Ford Model T “climbs” the steps of a YMCA (Young Men’s Christian Association) center. Source: Ford’s official site.
However, this is only a small part of the story. Cars today are faster, safer, more comfortable, more powerful and more reliable than ever. (Although the latter still is still a subject of debate today). All this is the result of a creative and free market.
The Model T was one of the greatest innovations of its time. Between 1908 and 1924, the price dropped from $850 to $260 as Henry Ford and his team began mass-producing the vehicles. However, with each new car, the engineers learned something new, which was then reflected in lower prices, higher wages and higher profits. Ford recognized that knowledge is the source that transforms elements and ideas into value.
Although the knowledge that can be acquired is limitless, our resources are limited. Finding the curve of knowledge and surrendering to the experiences offered by new discoveries – this is how we can help the human race flourish, so that we can freely create new things – this is what ultimately defines and propels the modern economy forward.
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